Thursday, September 17, 2015

Governor takes aim at State Treasurer: The cost of saying "no" to Il Duce

But the underlying battle may boil down to whether raiding the state land trust will enable more tax cuts for the rich. Let's start with the feud.

Laurie Roberts at The Republic exposes the blood feud between Guv Doozey and State Treasurer Jeff DeWit. DeWit's crime? Criticizing Dicey's plan to raid the state land trust to give some money to public education. DeWit points out, rightly in my estimation, that robbing future children to fund current needs is not a good solution.

It’s Doug Ducey and Jeff DeWit and before it’s over, I fully expect to see political blood flowing.

DeWit’s blood, I’m guessing.

The Republican governor and Republican state treasurer have been going at it for a few months now, ever since DeWit had the temerity to publicly oppose Ducey’s plan to temporarily boost school funding by taking more money from the state Permanent Land Endowment Trust Fund.

DeWit, who manages the trust, contends that Ducey's plan would rob schools in the long run and leave them facing a fiscal cliff in 10 years, when the extra money disappears.

"Apparently, no one has told him ‘no’ before …," DeWit told me. "For the first two months, I stuck with math and numbers (in expressing opposition to the plan). He told many people, including myself, that they’re basically going to make an example of me to show everybody else what happens when you oppose him because he doesn't want to be opposed on anything else in the future and so I'm the example. And so that's what we're going to see. How far they can throw me off the cliff for opposing him on an idea."

In July, he criticized Ducey’s school funding plan, which would add about $300 per student for five years and half that for five more before disappearing.

DeWit contends that taking an additional $2 billion out of the trust over 10 years would ultimately cost schools $8 billion over 40 years.

The Governor’s Office was not amused.

First, came the posters touting Ducey’s plan, nine of them set up outside the entrance to the Treasurer’s Office. Then came an employee of Noble’s political consulting firm, writing a piece for Breitbart News that ripped DeWit as "another thin skinned politician … who turns on conservative principles once elected."

"Unfortunately, Governor Ducey finds himself in the Capitol facing opposition from a Republican who prefers to pout because he doesn't get the credit he thinks he deserves," wrote Lisa De Pasquale, director of strategic communications at DC London.

DeWit hasn’t backed down.

In a recent presentation to education and business officials – annoyed, he says, at being introduced by a top Ducey staffer as Ebeneezer Scrooge -- DeWit responded that "cleaning up all the misinformation the Governor’s Office keeps putting out about this plan is like following around a dog with diarrhea. It doesn’t stop."

So what’s an Arizonan to think? Difficult to know without getting the two of them, side by side, to hash it out -- dueling charts and all.

At the urging of a reader, James Strock of Scottsdale, I asked if they’d be willing to publicly debate the funding plan, laying it out so Arizonans can evaluate whether or not it’s a good idea.

DeWit jumped at the suggestion. "Anytime, anywhere," he told me.

Alas, the governor’s spokesman said no, noting that Ducey has continuously traveled the state since June talking about his plan. "We’re going to continue talking about our plan and other people can talk about whatever they want," Scarpinato said.

Other people, meaning DeWit, who gives no evidence that he’s backing down from a fight with Team Ducey.

"They’re not good guys," he told me. "That’s the part I’m realizing. Some of the stuff I’m starting to see is they’re just not good people and they’re not honest people and they’re not moral people and quite frankly, they’re not the kind of people I’d want to associate with anymore anyways, in one sense. But I’d like to have a professional relationship because I think we could get more done for Arizona. But I don’t lose any sleep about not being friends with those guys anymore because I don’t agree with the way they go about their business."

The Ducey camp’s campaign hasn’t just been negative. In addition to the town hall, Ducey has been meeting with officials statewide. And this week his camp has been busily promoting an article about his plan on the Forbes website. At SaddleBrooke, Ducey himself mentioned the Forbes piece during his speech.

This was an embarrassing stunt by Ducey’s team. The article in question, which called Ducey’s plan "an excellent solution to the state’s education funding problem," wasn’t an article by a Forbes journalist or impartial expert. It’s essentially a blog entry by an ally.

The author is a Missouri lobbyist, Travis H. Brown, who comes from the same supply-side sect as Ducey — the one that seems to believe there is no problem to which cutting taxes is not the solution. He is also a supporter of the American Legislative Exchange Council and in ALEC’s August meeting, interviewed economist and supply-side guru Arthur Laffer onstage.

In other words, Ducey’s people, nationwide, support Ducey’s plan and are prepared to punish Republicans who don’t. ...

What's behind Doozey's stubbornness on taking money from the future and avoiding using the surplus now in the state treasury?

DeWit, a career financial professional, laughed when I told him that Senate President Andy Biggs and Ducey are avoiding referring to this money as a "surplus," calling it a "cash carry forward" instead.

"It is a surplus," DeWit said. "We have the money to settle the suit. I don’t care what name they put on it, the money’s there."

He noted that on Aug. 20, the Joint Legislative Budget Committee reported that at least $250 million of the current surplus "is likely to continue into ’16 and beyond."

So, again, why not tap those funds and spare the land trust money?

Why doesn’t Ducey want to use the surplus? My suspicion is that he prefers to use the surplus to continue cutting taxes — a commitment he made during the campaign. I hope not, because as I’ve shown before, Arizona already has low tax rates and needs more urgently to spend on its unmet needs than to keep cutting.

A compromise is evident — using some of the surplus and less of the trust fund than Ducey is proposing — but I can’t feel so assured they will reach it.

The Republicans with the best ideas — notably, using the surplus for education now — may not be able to prevail over those with the most powerful offices and the access to unlimited dark money for squelching dissent.

If Dicey Doozey does prevail and avoids using the surplus for education funding, watch for more tax cuts that mainly benefit the wealthy. Such cuts would amount to robbing from the children of the future to give to the rich of today. That would be, in DeWit's terms, not only dishonest, but immoral.